Yahoo tests latest local search product

Plus: SportsLine's Mike Levy discusses Viacom deal

BambiFrancisco

SAN FRANCISCO (CBS.MW) -- As the number of keywords and phrases to be searched online nears a ceiling, search engines are working toward expanding the inventory for advertisers to bid on.

One way to do so is to extract more information about local merchants in order for searchers to find them under new keywords, such as "Sunday brunches."

Such is the case with Yahoo's local endeavors.

Sunnyvale, Calif.-based Yahoo
YHOO
which unveiled the latest version of its local search site Tuesday, has aggregated more information about local merchants around the country.

This way, people searching for the smallest of services, such as Sunday brunches, will receive a list of restaurants in a particular area fitting the specified criteria.

Yahoo has received more content and information from businesses, such as products offered, categories, hours of operation and so on, said Paul Levine, general manager of Yahoo Local.

At this juncture, most search engines would likely list restaurants that don't even serve Sunday brunches, said Levine.

Yahoo's latest innovation is still in the testing stages, but it's the third relatively major announcement in the last year as the company -- along with other search engines, such as Google, Ask Jeeves
ASKJ
and InfoSpace
INSP, +3.36%
as well as phone companies like Verizon Communications
VZ, +0.46%
-- move to unlocking the potential of local advertising on the Internet.

Kelsey Group researchers estimate that $450 million was spent in online yellow-pages advertising in 2003. By contrast, the yellow-pages industry as a whole is estimated to be $22 billion annually.

Yahoo's concerted effort to raise the bar as a provider of local listings began in April 2003, said Levine. At that time, Yahoo integrated its yellow-pages listings into Web search.

Yahoo further enhanced local search by integrating its maps and listings with its SmartView service in March 2004.

Currently, Yahoo's latest local product integrates SmartView interactive technology along with more content from a dozen sources and more information about the 14 million businesses that are included in Yahoo's local listings service.

In addition, Yahoo's allowing users to offer their opinion for products or services. This type of user feedback is one of the unique and appealing aspects of the Web.

For how to play the search-engine stocks amid the imminent Google offering, see August's Net trading strategies: See full story.

A glimpse forward, and a look back

After starting Ft. Lauderdale-based SportsLine.com
SPLN, +33.33%
back in 1994, Mike Levy is close to moving on to his next venture.

Viacom
VIAVIA, +0.49%
which has a 38 percent interest in SportsLine, said it'll spend $46.4 million, or $1.75 per share, to buy the remaining stake in the online sports media company it doesn't already own. See related story.

Viacom disclosed its plans for the buyout early last month with a proposed price of $1.50 per share. Shareholders balked at that price, however, and the agreement announced Monday values the shares nearly 17 percent higher. The deal is still subject to approval by SportsLine shareholders.

The deal made sense for Viacom to have a majority stake in SportsLine because the media property was close to profitability, said a Viacom spokesperson.

Last year, CBS, a unit of Viacom, opted against majority ownership because the network didn't want to consolidate SportsLine's losses, said SportsLine's Levy. See related story.

Levy will stay on with Viacom for as long the company needs him, he said in an interview with CBS MarketWatch. He's likely to stay on with the company until the deal closes in the fourth quarter.

After that time, if he doesn't have a new venture to start, he may take some time off to bring down his 16 handicap in golf.

Asked what big lesson he's learned about structuring deals, Levy said: "Don't count on your future stock to be at a future level."

SportsLine paid for advertising with stock. The deal that Levy agreed to was to buy $100 million of advertising with $100 million worth of stock over a five-year period.

Unfortunately for Levy and SportsLine shareholders, the stock cratered, which meant SportsLine was obligated to give up more shares for the advertising.

Said Levy: "You owe a lot more stock." He still owns 5 percent of SportsLine.com.

Viacom is a significant investor in MarketWatch, the publisher of this report.

(Editor's Note: MarketWatch would like to profile a small investor seriously seeking to participate in Google's upcoming IPO. We'd like to follow his or her process. Interested? Also, is Google expensive? E-mail your story to: bfrancisco@marketwatch.com.)

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